REGENXBIO(RGNX) - 2021 Q2 - Quarterly Report

PART I—FINANCIAL INFORMATION Financial Statements (Unaudited) This section presents REGENXBIO Inc.'s unaudited consolidated financial statements for the quarter ended June 30, 2021 Consolidated Balance Sheets The balance sheet as of June 30, 2021, details the company's financial position, reflecting growth in assets and equity | Account | June 30, 2021 ($ in thousands) | December 31, 2020 ($ in thousands) | | :--- | :--- | :--- | | Total Current Assets | 437,387 | 531,197 | | Total Assets | 836,402 | 708,164 | | Total Current Liabilities | 91,554 | 81,447 | | Total Liabilities | 329,157 | 330,411 | | Total Stockholders' Equity | 507,245 | 377,753 | Consolidated Statements of Operations and Comprehensive Loss For the three months ended June 30, 2021, revenues increased, but rising operating expenses resulted in a wider net loss | Metric | Three Months Ended June 30, 2021 ($ in thousands) | Three Months Ended June 30, 2020 ($ in thousands) | | :--- | :--- | :--- | | Total Revenues | 22,035 | 16,566 | | Total Operating Expenses | 74,261 | 58,399 | | Loss from Operations | (52,226) | (41,833) | | Net Loss | (57,639) | (33,762) | | Net Loss Per Share | (1.36) | (0.91) | Consolidated Statements of Cash Flows For the six months ended June 30, 2021, net cash used in operations and investing was partially offset by financing activities | Cash Flow Activity | Six Months Ended June 30, 2021 ($ in thousands) | Six Months Ended June 30, 2020 ($ in thousands) | | :--- | :--- | :--- | | Net cash used in operating activities | (71,003) | (57,069) | | Net cash provided by (used in) investing activities | (206,384) | 77,191 | | Net cash provided by financing activities | 196,033 | 4,586 | | Net (decrease) increase in cash | (81,354) | 24,708 | Notes to Consolidated Financial Statements The notes provide detailed disclosures on accounting policies, key financial items, and legal matters, including the company's business and financial health - The company is a clinical-stage biotechnology firm focused on gene therapy via its proprietary NAV Technology Platform. As of June 30, 2021, it had an accumulated deficit of $396.9 million but held $593.0 million in cash, cash equivalents, and marketable securities, which management believes is sufficient to fund operations for at least the next 12 months[27][28] - In December 2020, the company sold rights to a capped amount of future Zolgensma royalties to HCR for $200.0 million. This transaction is accounted for as a liability, with non-cash interest expense recognized using an effective interest rate of 13.7% as of June 30, 2021[49][53] - Royalty revenue from Novartis Gene Therapies for Zolgensma sales was $18.4 million for Q2 2021 and $36.7 million for the first six months of 2021[65] - An arbitration tribunal ruled in favor of the company in its dispute with Abeona Therapeutics, awarding $33.6 million in damages and interest. However, due to uncertainty about collection, the company has recorded an allowance for credit losses of $8.2 million against the receivable[68][70] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's business strategy, clinical pipeline, financial performance, and liquidity, highlighting key drivers of change - The company is advancing its pivotal program for RGX-314 in wet AMD, with one trial enrolling and a second planned for Q4 2021, targeting a BLA filing in 2024. It is also advancing suprachoroidal delivery of RGX-314 in Phase II trials for wet AMD (AAVIATE) and diabetic retinopathy (ALTITUDE)[87][89][90] | Metric | Three Months Ended June 30, 2021 vs 2020 | Six Months Ended June 30, 2021 vs 2020 | | :--- | :--- | :--- | | License and Royalty Revenue | Increased by $5.5M | Increased by $6.7M | | Research and Development Expense | Increased by $7.8M | Increased by $10.5M | | General and Administrative Expense | Increased by $2.9M | Increased by $5.9M | | Net Loss | Increased by $23.9M | Increased by $34.0M | - The increase in license and royalty revenue was primarily driven by higher Zolgensma royalties, which grew 54% in Q2 2021 vs Q2 2020 due to geographic expansion[118] - R&D expenses rose due to increased costs for clinical trial activities, particularly for RGX-314 and RGX-121, higher personnel costs from increased headcount, and preclinical research[119][123] - As of June 30, 2021, the company had $593.0 million in cash, cash equivalents, and marketable securities. In January 2021, it raised net proceeds of $216.1 million from a public stock offering[125][126] Quantitative and Qualitative Disclosures About Market Risk The company states no material changes to its market risk exposure occurred during the six months ended June 30, 2021 - There have been no material changes to the company's exposure to market risk during the first six months of 2021[142] Controls and Procedures Management concluded the company's disclosure controls and procedures were effective as of June 30, 2021, with no material changes in internal control - The CEO and CFO concluded that as of June 30, 2021, the company's disclosure controls and procedures were effective at a reasonable assurance level[144] - No changes occurred during the quarter ended June 30, 2021, that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[145] PART II—OTHER INFORMATION Legal Proceedings This section directs the reader to Note 8 of the consolidated financial statements for information regarding legal proceedings - Information regarding legal proceedings with Abeona Therapeutics Inc. is detailed in Note 8, "License and Royalty Revenue—Abeona Therapeutics Inc.," of the financial statements[149] Risk Factors The company highlights risks related to third-party licensing agreements and collaborations, citing the Abeona dispute, with no other material changes from prior disclosures - There have been no material changes from the risk factors previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2020, with one specified exception[150] - The company highlights risks related to its reliance on third-party licensees and collaborators for the development and commercialization of products using its NAV Technology Platform. The dispute with Abeona is cited as an example of these risks[150][151][154] Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities or use of proceeds during the reporting period - None[158] Other Information The company reported no other material information required to be disclosed in this section for the reporting period - None[161] Exhibits This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including CEO and CFO certifications and financial data in Inline XBRL - The exhibits filed with this report include certifications from the CEO and CFO as required by Section 302 of the Sarbanes-Oxley Act and financial statements formatted in Inline XBRL[162]